Student Loan Stories

[anewconvert]

Why are you assuming that? Almost all government loans, with the exception of parent plus loans and perkins, are eligible.

 

Well some people have taken out their loans through private institutions (not likely here given the OP's repayment schedule) and they don't count. Also consolidating loans through a private institution can disqualify you.  Not working a qualifying job disqualifies you.  And:

 

 

not planning to pay it back in 10 yrs unless it's dismissed for public service. Otherwise will be dismissed at 25 years.

 

This statement leads me to believe NDS111 hasn't put a lot of thought into this and may have done something that could have disqualified the loans.

 

So it is reasonable to assume that the loans the (s)he has may not actually end up qualifying for 10 year forgiveness.  In the end I was directly addressing the idea that waiting for loan forgiveness after 25 years was a good idea when it is within your means to take care of the loans sooner. I was being careful in my statements instead of definitive.  The summative point of all of my posts has been that NPS needs to talk to a professional about loan debt and repayment because his/her income will be high enough and the debt level will certainly be high enough that there are potentially enormous consequences to how this is all handled that a professional can sort through better than shrugging your shoulders and saying "i'll get loan forgiveness"

 

and for the record parent PLUS loans are eligible for 10 year forgiveness if the parent who took them out works for a qualifying entity.

[GreyhoundGirl]

Well some people have taken out their loans through private institutions (not likely here given the OP's repayment schedule) and they don't count. Also consolidating loans through a private institution can disqualify you.  Not working a qualifying job disqualifies you.  And:

 

This statement leads me to believe NDS111 hasn't put a lot of thought into this and may have done something that could have disqualified the loans.

 

So it is reasonable to assume that the loans the (s)he has may not actually end up qualifying for 10 year forgiveness.  In the end I was directly addressing the idea that waiting for loan forgiveness after 25 years was a good idea when it is within your means to take care of the loans sooner. I was being careful in my statements instead of definitive.  The summative point of all of my posts has been that NPS needs to talk to a professional about loan debt and repayment because his/her income will be high enough and the debt level will certainly be high enough that there are potentially enormous consequences to how this is all handled that a professional can sort through better than shrugging your shoulders and saying "i'll get loan forgiveness"

 

and for the record parent PLUS loans are eligible for 10 year forgiveness if the parent who took them out works for a qualifying entity.

Fair enough. I just wanted to clarify that almost all government loans are eligible. I know private ones aren't. 

[Guest]

My loan situation (157K) is keeping me working for non-profit (teaching hospitals). There is nothing wrong with these hospitals as many of them are state of the art. The problem is, I haven't been able to find many hospital-employed PA positions in my state. If I do, I "don't have enough experience" (you all know that song). I can't work for private practice which is where all jobs seem to be.  The reason for it is: I am going for the loan forgiveness after 10 years of working for non-profit. I work for a non-profit hospital now but it is not a good fit and I am looking for something else.

[MT2PA]

My loan situation (157K) is keeping me working for non-profit (teaching hospitals). There is nothing wrong with these hospitals as many of them are state of the art. The problem is, I haven't been able to find many hospital-employed PA positions in my state. If I do, I "don't have enough experience" (you all know that song). I can't work for private practice which is where all jobs seem to be.  The reason for it is: I am going for the loan forgiveness after 10 years of working for non-profit. I work for a non-profit hospital now but it is not a good fit and I am looking for something else.

 

This is what makes me hesitant to pursue PSLF.  If I end up finding my dream job in the private sector but get stuck with IBR, I end up paying much more over much longer than if I just sucked it up and did the 10 year standard repayment and got it over with.  

[anewconvert]

My loan situation (157K) is keeping me working for non-profit (teaching hospitals). There is nothing wrong with these hospitals as many of them are state of the art. The problem is, I haven't been able to find many hospital-employed PA positions in my state. If I do, I "don't have enough experience" (you all know that song). I can't work for private practice which is where all jobs seem to be.  The reason for it is: I am going for the loan forgiveness after 10 years of working for non-profit. I work for a non-profit hospital now but it is not a good fit and I am looking for something else.

 

You may already know this, but your 120 payments don't have to be consecutive.  You could take a year in private practice to get experience then move back into a non-profit hospital and start where you left off.

[MT2PA]

You may already know this, but your 120 payments don't have to be consecutive.  You could take a year in private practice to get experience then move back into a non-profit hospital and start where you left off.

 

Yea....but if you fall in love with it, it would be hard to go back.  Taking advantage of the repayment plans is very tempting but since it's only really beneficial under PSLF (20 years of IBR w/o PSLF just results in paying a lot more but less at a time) it's not a decision to take lightly, I guess.

[Soulfari]

Yes. Non profit positions only

 

Does working for the Mayo Clinic qualify one for this 10 year minimal payment plan that ends in forgiveness? I know Mayo offers their employees 403(b)s due to them being "Non profit"

[delco714]

Yes

[GreyhoundGirl]

This is what makes me hesitant to pursue PSLF.  If I end up finding my dream job in the private sector but get stuck with IBR, I end up paying much more over much longer than if I just sucked it up and did the 10 year standard repayment and got it over with.  

Just so you know, you can change payment plans at any time so you wouldn't have to be "stuck" with anything.

[delco714]

Just so you know, you can change payment plans at any time so you wouldn't have to be "stuck" with anything.

Or Pay MORE per month ..duh

[MT2PA]

Just so you know, you can change payment plans at any time so you wouldn't have to be "stuck" with anything.

 

Yea but flip-flopping back and forth may end up in me paying more overall than either just sticking to the 10 yr PSLF or 10 yr standard depending on jobs.  It's all a numbers game and we never win.

[Guest]

You may already know this, but your 120 payments don't have to be consecutive.  You could take a year in private practice to get experience then move back into a non-profit hospital and start where you left off.

 

True, but that means it's an extra year I have debt. I have 9 years left and cannot wait to get rid of it. The work I do now does not get me ALL the experience I want, but it gives me some, which is enough considering the amount of money I have to repay vs. get forgiven. Plus, having a job in non-profit allows me to wait for a perfect job in another non-profit, without being desperate. I won't lie, paying based on income prevents me from  living paycheck to paycheck on a standard repayment plan for 10 years. That's because I live in a very expensive area. A typical tiny one bedroom apartment costs $1500-1700 a month rent. So now you see the problem :D. 

[Boatswain2PA]

You can just FEEEEELLLL the STRESS dripping  off of some of these posts.  People get caught up in the "I'll make great money as a PA so I can afford the student loans"...only to find out that they are sacrificing years of their future hard work.

 

whatever you do with loans/finances/etc starting out after school, first and foremost set aside at least 12-14% of your pay for retirement/401(k) and never go lower than that.

 

I disagree with this.  No need to put that much in retirement when you're in debt.  It is better to pay off the debt FIRST, then hit retirement heavy.

Due to the limited amount that you can put into a ROTH, and it's tax free growth, I wouldn't disagree with someone maxing out their ROTH while still in debt.  You can only put in a little bit ($5500) per year, and the earliest years get you the best tax-free growth, so I think that's reasonable.  The same with an HSA if you're eligible.  But even then I wouldn't invest in this unless you were paying off your debts in massive payments ($5k, $6K, $7K or more a month).

Also reasonable, IF you are making massive debt payments, is to take advantage of company match into 401K/403B, as it's free money.  But I wouldn't do more than the match until you get your debts paid off.

Putting 12-15% of income into retirement will extend your debt payments by years.

Hahaha...Hahaha...Hahaha!!! Bingo. You make too much $. ;)

Every debt-repayment plan has a catch.  This is why, for the vast majority of people, it's better to hit the debt HARD and get out of debt, and into freedom, in 3-5 years.

 

not planning to pay it back in 10 yrs unless it's dismissed for public service. Otherwise will be dismissed at 25 years.

You should run for congress.  Your an expert at "kicking the can down the street".

 

Still worth talking to a financial planner.  Any loans applicable to the public service forgiveness (health care education associated loans) can be paid off after 120 payments made while working for a non-profit, and it's not considered taxable income.  If your existing loans don't fall under that umbrella then in theory you could have them forgiven at 25 years, but the balance that is forgive at 25 years is taxable income.  If you have $40k forgiven then that is consider $40k in income that you didn't have taxes taken out during the year to cover.  If you are married making less than $150k a year (or whatever the rate is then) you would be looking at a tax bill of $10k due immediately.  It's worse if your principle is higher or a spouse has student loan debt.  

 

Doing a very quick repayment calculator (married filing jointly, $125k a year with 2 kids.  anymore than that and your IBR repayments are high enough that results in loans being paid off at 25 years) you'd have roughly $65k forgiven after paying $362k in payments on a $189k.  You'd face a one time tax of about $15,000.  

 

So to have $65k forgiven you'd have to keep your income down and pay $100k extra in interest charges over that 25 years (versus paying the loan down in 10 years) plus a $15k-ish tax bill.  So pay an extra $115k or so to have $65k forgiven.  All of this is, of course, assuming your current loans don't count under the loan forgiveness for service program, which based on your reply, probably doesn't.

 

And you haven't even added in your PA school loans.

 

There isn't a problem there...s/he can still find another lender to give him/her more money.  

 

My loan situation (157K) is keeping me working for non-profit (teaching hospitals). There is nothing wrong with these hospitals as many of them are state of the art. The problem is, I haven't been able to find many hospital-employed PA positions in my state. If I do, I "don't have enough experience" (you all know that song). I can't work for private practice which is where all jobs seem to be.  The reason for it is: I am going for the loan forgiveness after 10 years of working for non-profit. I work for a non-profit hospital now but it is not a good fit and I am looking for something else.

This is the problem with all of the student loan repayment programs...they all have "a catch" to them.  Sometimes you can live with that catch, othertimes you don't realize how big of a problem it is until you've started down that road.


Debt is bad.  Student loans are bad.  Buckle down, work extra shifts, make a ton of money, and hit them in the face until they are gone.

Then you can experience the freedom of a great paying job!

[south]

 

What I'm mostly curious is if PA school loans will affect my ability to purchase a home in the future and saving up for my kid's college fund (if I end up deciding to have kids).

 

 

I have been looking into this.  Your credit rating will take a significant hit because of the amount of money you are borrowing.  Mine, which was near the max, plummeted 180+ points with no other effects on it (other than one new credit card account).  

 

But what is most interesting is that FICO is significantly figured on your "distance from max borrow" or "% paid off".  What this means is that the day your loans are capitalized, and if you consolidate, or (please don't) refinance, you are going to take a massive hit again because that starts at 0% paid off again.

 

I've saved up some money and once my loans capitalize, I'm going to pay it down with that, in case I want to buy a house or something in the short term.

 

I was a evil 1% for a while before school, now got little piles of money laying around and 100% spotless credit and was turned down for a $10k car loan.  First time.  And quite a blow. Debt is bad, ya'll.  

 

Check it out.  I learned several things from this right here.  

 

http://www.myfico.com/credit-education/credit-scores/

[delco714]

I have been looking into this. Your credit rating will take a significant hit because of the amount of money you are borrowing. Mine, which was near the max, plummeted 180+ points with no other effects on it (other than one new credit card account).

 

But what is most interesting is that FICO is significantly figured on your "distance from max borrow" or "% paid off". What this means is that the day your loans are capitalized, and if you consolidate, or (please don't) refinance, you are going to take a massive hit again because that starts at 0% paid off again.

 

I've saved up some money and once my loans capitalize, I'm going to pay it down with that, in case I want to buy a house or something in the short term.

 

I was a evil 1% for a while before school, now got little piles of money laying around and 100% spotless credit and was turned down for a $10k car loan. First time. And quite a blow. Debt is bad, ya'll.

 

Check it out. I learned several things from this right here.

 

http://www.myfico.com/credit-education/credit-scores/

Bahaha give me a break. My ex and i had 140k each from PA school, bought new cars had 2 mortgages. I'm single with a gf now and have two cars myself and 3 credit cards with banana limits and over 800. My credit never took a dive after forbearance ended and repayment began

 

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[greenmood]

Bahaha give me a break. My ex and i had 140k each from PA school, bought new cars had 2 mortgages. I'm single with a gf now and have two cars myself and 3 credit cards with banana limits and over 800. My credit never took a dive after forbearance ended and repayment began

 

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Agreed. I have bonkers in student loans, but I have perfect credit, got a 0% interest new car loan when I was two months into my first job, and had no problem getting a ridiculous mortgage solo a couple months after that.

 

You know when my credit did actually dip? When I paid off (and then cancelled) a bunch of store credit cards after I took Dave Ramsey's Financial Peace class. 

 

But now it's perfect again.

 

To answer the earlier question about loans affecting your ability to make free financial decisions in the future, OF COURSE THEY DO. Absurd question. That kind of debt impacts every financial decision you make.

[Eking001]

I have been looking into this.  Your credit rating will take a significant hit because of the amount of money you are borrowing.  Mine, which was near the max, plummeted 180+ points with no other effects on it (other than one new credit card account).  

 

But what is most interesting is that FICO is significantly figured on your "distance from max borrow" or "% paid off".  What this means is that the day your loans are capitalized, and if you consolidate, or (please don't) refinance, you are going to take a massive hit again because that starts at 0% paid off again.

 

I've saved up some money and once my loans capitalize, I'm going to pay it down with that, in case I want to buy a house or something in the short term.

 

I was a evil 1% for a while before school, now got little piles of money laying around and 100% spotless credit and was turned down for a $10k car loan.  First time.  And quite a blow. Debt is bad, ya'll.  

 

Check it out.  I learned several things from this right here.  

 

http://www.myfico.com/credit-education/credit-scores/

 

 

I have more student loans by myself than anyone on this thread and my credit score is VERY high and has never taken a hit based on the amount I took out for student loans. 

[majetito]

Personal finance is something that isn't taught in most universities. I'm grateful my grandmother gave me Dave Ramsey's "Total Money Makeover" about 10 years ago. Do a youtube search for dave ramsey. Will save you a bunch of headache/heartache later when it comes to financial decisions.

[boli]

Recipe for financial independence:

-Avoid debt (if you're in debt pay it off ASAP) Live off mac'n'cheese and free samples if you have to. Nothing is more detrimental to your finances than debt. 

-Live below your means. Doesn't mean you have to live in a shack, but don't do what many Americans do and buy big house, big car, etc if you can't afford it. 

-Invest the excess. I personally like index funds but that's open to debate. 

 

Once you have 25x your annual expenses invested you are considered financially independent. You now have FU money.

[Torshi]

Waiting for the day to exit the PA field and venture off into the finance world. Overall, just not worth it imo in the long-term.. 

 

[delco714]

Recipe for financial independence:
-Avoid debt (if you're in debt pay it off ASAP) Live off mac'n'cheese and free samples if you have to. Nothing is more detrimental to your finances than debt. 
-Live below your means. Doesn't mean you have to live in a shack, but don't do what many Americans do and buy big house, big car, etc if you can't afford it. 
-Invest the excess. I personally like index funds but that's open to debate. 
 
Once you have 25x your annual expenses invested you are considered financially independent. You now have FU money.

So a millionaire

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[boli]

So a millionaire

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Depends on your lifestyle. If your expenses are greater than 40k /yr then yes, you need 1M to hit that benchmark. Some people can live off 10k a year. Also, 1M is really not that vast of a sum to save with the power of compounding interest


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[delco714]

Depends on your lifestyle. If your expenses are greater than 40k /yr then yes, you need 1M to hit that benchmark. Some people can live off 10k a year. Also, 1M is really not that vast of a sum to save with the power of compounding interest


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Thanks for the lesson. I was being facetious. I'm quite good with numbers and finances! A mortgage is enough to get you past 10k a year. Have you bought healthy groceries recently :). For a family? Lol. Yup

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[boli]

On 10/10/2017 at 0:07 PM, delco714 said:

Thanks for the lesson. I was being facetious. I'm quite good with numbers and finances! A mortgage is enough to get you past 10k a year. Have you bought healthy groceries recently :). For a family? Lol. Yup

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Haha hard to tell sarcasm over the Internet. But yes my wife loves to shop at wholefoods and it kills me a little inside


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[EkePA]

On 9/21/2015 at 1:56 PM, greenmood said:

I'm really wary of sharing too much here, but here goes. If you have any specific questions I'm happy to answer through PM if you think it will help you.

 

We currently owe $293,000 in student loan debt. I won't go into the gory details but we both attended state schools (myself on a partial scholarship) for undergrad and worked during school with no financial support from our parents. We both returned for masters degrees in our chosen fields several years after graduating. We are in our early thirties. We have a car payment. We have a house payment. We have a medically complex baby.

 

We could (should) have waited to buy the house. We could (should) have bought a used car. I regret nothing about the baby.

 

I make a very good salary for a PA two years out of school (115K). My husband works in a lower income field. We started taking Financial Peace classes, and my new (kinda harsh) friend Dave Ramsey says I should be able to pay off a good chunk of those loans in the next five years. If I had deferred the house and purchased a used car we would be in even better shape since we live in a very low cost of living area of the country.

Thank you for sharing this